Canada Pension Plan Reports 3.1% Annual Return

The Canada Pension Plan (CPP) has been weathering the coronavirus pandemic just fine.

The CPP earned a return of 3.1% after expenses during the financial year ended March 31, the board that manages the fund's money has reported. Net assets for Canada's national pension plan totaled $409.6 billion as of the end of March, up from $392 billion at the end of the previous financial year.

The $17.6-billion year-over-year increase included $12.1 billion in net income from its investments. The other $5.5 billion came from the contributions of more than 20 million Canadian workers who are covered by the national plan.

In the past five years, investment returns have added $123 billion to the fund's assets, the Canada Pension Plan Investment Board said.

While the plan made money for the year as a whole, the fourth quarter was difficult because of COVID-19. The fund said fixed-income assets improved as investors fled for safety, but the value of its stock-based investments fell.

That annual return of $12 billion implies the fund lost about $16 billion during the pandemic. The pension plan reported nearly $28 billion worth of investment gains during the first nine months of its fiscal year.

The CPP measures its performance against a series of market-based benchmarks, the main one being the "Reference Portfolio." That Reference Portfolio declined by 3.1% in the past year, the same amount by which the CPP increased.